Nowadays, we live in a society where buying to rent is the norm. Can you recall when people thought spending money on horse armor in a video game was funny? Many believed that such a concept could never succeed. Then came the subscription premium model on services, which were once free.
This principle applies to any service. Greed possesses a remarkable ability to drive companies. However, the issue lies in the collusion between large businesses and the government. Meanwhile, we, the people, are preoccupied with the trivial matters of which celebrity is wearing what at the Golden Globes. It is important to note that capitalism and the free-market system do not necessarily lead to high-quality products. Instead, companies often prioritize whatever is necessary to maximize profits by digging deep into the consumers’ pockets.
Subscription is the Name of the Game
The adoption of the subscription model by Netflix initiated a surge in profits. However, these gains have proven to be temporary as numerous TV channels are now establishing their own subscription services, thereby withdrawing content from Netflix. Moreover, companies, being fixated on short-term gains, cannot envision the long-term implications. Consequently, there is a growing trend of organizations jumping on the subscription bandwagon.
Lexus, Toyota, and Subaru are among the brands that extend an invitation to their owners to avail of the option of remotely locking or starting their cars through a dedicated mobile app. These car manufacturers want to generate revenue by implementing monthly charges for additional features, such as heated seats. In another instance, some BMW models offer the option to pay for unlocking automatic high-beam headlights that dim when encountering oncoming traffic. However, it seems potential buyers are reluctant to pay for these services.
The YouTube Vs. Spotify Debate
Meanwhile, here is a debate that YouTube lovers usually have with Spotify fans. How can YouTube Music effectively compete when users should pay for an ad-free experience and the ability to listen with the screen off, while Spotify already offers the – listen with the screen off option – without any payment? But there is a catch with both.
Personally speaking, I began using YouTube Music without a Premium subscription. However, after approximately a year, I grew weary of the bothersome advertisements and decided to upgrade to Premium. This transition proved to be pretty expensive.
But, if you subscribe to YouTube Music Premium, you can download YouTube Music either through the YouTube Music Web Player or the YouTube Music app. This feature allows premium users to access and listen to YouTube Music offline within the YouTube Music platform.
However, if you are using YouTube Music Free, this functionality is not available. Additionally, any songs you download get saved as cache files temporarily. Hence, you will lose access to offline streaming if your YouTube Music Premium subscription expires. In such cases, you will require a separate tool.
In the meantime, I withdrew my Spotify Premium subscription due to its lack of use. I fail to understand why people continue to use Spotify. When I was using Spotify without a subscription, it restricted my ability to skip songs, select specific parts of a song, or put a song on repeat. Additionally, it started adding unrelated songs to my playlist that did not align with my musical preferences. Of course, I know that Spotify eventually requires payment if you want to enjoy its services. But I was unaware of how limited the free version was. Subsequently, Spotify began promoting the advantages of their subscription plans, such as access to the complete Spotify library, ad-free listening, the ability to download songs for offline listening, control over the shuffle feature, high-quality audio, and personalized recommendations, among other features.
Someone said that Spotify helps you find new songs. But how? If they cannot even tell what kind of songs a person likes? So, do most people who use Spotify pay for it? Or do they listen to random songs? Maybe. I have no idea, but I uninstalled it and will not recommend its price tag.
How Subscription-Based Apps Hook You
For some time now, subscriptions have become increasingly prevalent in our lives. Rather than making a one-time payment for an app and using it until you upgrade to the latest version, you need to pay a monthly fee, or else the app ceases to function entirely.
The most fascinating part is that nearly everything we use today incorporates apps, even vehicles. And companies are particularly fond of this recurring subscription revenue. It gives them an excellent method to continuously profit from customers, even after they spend substantial amounts on a new product. Furthermore, it presents an opportunity to generate income from their brands even after they enter the second-hand, used market.
The Trojan Horse Strategy: Once you subscribe to a particular service, your inclination to purchase other products from the same company significantly increases. This effect is precisely why Amazon is highly motivated to encourage customers to subscribe to services such as Prime or Subscribe & Save. Amazon recognizes that once a person becomes a subscriber, their likelihood of purchasing additional products from the vast array available significantly rises.
The Endless Benefits of a Continuous Sale: Whereas the transactional business model relies on advertising to generate demand and make customers purchase, a subscription-based model offers ongoing benefits. Once a subscription gets sold, it continues month after month.
Using Research: Data and market research are crucial in understanding customer behavior and preferences. By acquiring customer subscriptions, businesses gain valuable insights into spending and consumption habits. This data allows companies like Netflix to make informed decisions on producing new shows and discontinuing others.
Subscription Revenue to Rake in The Moolah!
Track records show that subscription-based applications generate more revenue per user than other business models. Moreover, developers of subscription apps on the App Store receive a higher share of the subscription fees, providing an additional incentive. Initially, developers receive 70% of the subscription revenue. This rate is the standard commission for all apps. However, after one year, the percentage increases to 85%. It is worth noting that many companies are transitioning towards a recurring revenue bundle model, commonly referred to as a rundle. Unfortunately, legislating this model may take several years, if it even occurs at all. Additionally, these companies may continue their questionable practices due to political lobbying.
Is Regulation Necessary?
Is it premature to establish a regulatory structure for these subscription model services?
As a society that needs balance, our predicament lies in our failure to address these unfair practices before they spiral out of control.
This practice is primarily due to the avarice of bureaucrats who prioritize their own power and wealth, allowing greedy companies to exploit this for their advantage and manipulate legislation to avoid regulation.
In many countries, corporate interests have essentially captured the legislature, propelling the country toward a rapid transformation into a complete plutocratic kleptocracy.
Summing Up: What is a Fair Transaction?
This article, originally intended as a satirical take on unchecked capitalism and its consequences, has become a stark reality as capitalism enters its advanced stage. Should an economic system be willing to disregard any consequences and even jeopardize the entire world if it means making a profit? That is why it is crucial to impose strict controls and regulations to rein it in.
Nowadays, companies are inherently predatory and lack long-term vision. Unlike predators in nature that instinctively adjust their reproductive efforts to maintain a balance with their prey, unbridled corporate giants will gladly undermine their own customer base for short-term gains. The current state of the global market exemplifies their natural inclination: prioritizing immediate profit while disregarding the future and the harm inflicted upon end users.